CLSA in LA Times: With new allies and approaches, California lawmakers try again to confront high prescription drug prices

Less rowdy than the sputtered push for single-payer healthcare and less fraught than the battle over Obamacare’s future, the concern over the cost of prescription drug prices has been overshadowed for the past year by the marquee healthcare battles gripping Sacramento and Washington.

That’s not likely to be the case much longer. The effort to rein in pharmaceutical costs is poised for a major showdown as state lawmakers enter their final month of the legislative year.

An example of a drug coupon, which one California bill seeks to clamp down on. The measure is one of several tackling prescription drug prices. (Gary Coronado / Los Angeles Times)

The debate conjures déjà vu. Much of the action centers on legislation that recalls a failed 2016 bill to require more disclosure around prescription prices, with lobbying efforts tracing familiar battle lines — labor unions, health plans and consumer groups facing off against drug manufacturers.

But several new factors this year have made proponents bullish about their prospects. The price disclosure bill , SB 17 by state Sen. Ed Hernandez (D-Azusa), is now one of five measures that have been proposed to tackle prescription costs, forcing the drug industry to fend off multiple threats. Supporters have picked up new allies on the left, including deep-pocketed Democratic activist Tom Steyer, and on the right, with “aye” votes cast by a handful of GOP lawmakers.

The issue remains fresh. Over the last few years, high-profile stories have captured the public’s attention, such as the legal saga of convicted pharmaceutical executive Martin Shkreli and the steep increase in the price of EpiPens, which are commonly used to ward off severe allergic reactions.

“Each consecutive outrage and story just creates some urgency, if not inevitability, that something needs to be done,” said Anthony Wright, executive director of Health Access California, an advocacy group.

Around $320 billion was spent in the U.S. on prescription drugs in 2015, according to the federal Centers for Medicare and Medicaid Services. After relatively slow growth in drug spending in the early 2000s, spending surged by 12.4% in 2014, mostly due to expensive new specialty drugs hitting the market. In 2015, spending grew at a lower rate of 9%.

Hernandez has pitched his measure as a way to better understand what’s driving that spending. His bill would require health plans to report to the state the 25 drugs that are most frequently prescribed, those that are most costly and those that have had the highest year-to-year increase in spending.

The measure also would require drugmakers to provide notice to health plans and other purchasers 60 days in advance of a planned price increase, if the hike exceeds certain thresholds.

Manufacturers have chafed at the proposal, arguing that requiring disclosure of list prices — the full sticker cost set by drugmakers — distorts what’s actually being paid by health plans and other big purchasers, which can negotiate discounts, and by consumers, who frequently make use of drug rebates and coupons.

“This bill is really just a way to shame the industry on list prices, which in no way reflect the actual cost of drugs,” said Brett Johnson, senior director of policy and regulatory affairs for the California Life Sciences Assn. “Clearly, those who are trying to use this misleading information want to use it in a shaming way, putting our industry in a negative light.”

Drug companies, which raised more than $100 million to defeat a 2016 ballot measure to cap what state agencies could pay for drugs, said they’re not shying away from the affordability question.

“We want to talk about costs. We want to find solutions for patients,” said Priscilla VanderVeer, deputy vice president of public affairs for Pharmaceutical Research and Manufacturers of America. “We continue to struggle with: What is the outcome of this [measure] and how will it help patients? How does it truly affect what happens in the marketplace?”